They Play, You Pay: Why Taxpayers Build Ballparks, Stadiums, and Arenas for Billionaire Owners and Millionaire Players

By James T. Bennett

They Play, You Pay is a detailed, sometimes irreverent look at a political conundrum: despite evidence that publicly funded ballparks, stadiums, and arenas do not generate net economic growth, governments keep on taxing sales, restaurant patrons, renters of automobiles, and hotel visitors in order to build ever more elaborate cathedrals of professional sport—often in order to satisfy an owner who has threatened to move his team to greener, more subsidy‑happy, pastures.  This book is a sweeping survey of the literature in the field, the history of such subsidies, the politics of stadium construction and franchise movement, and the prospects for a re‑priva­ti­zation of ballpark and stadium financing. It ties together disparate strands in a fascinating story, examining the often colorful cases through which governments became involved in sports. These range from the well‑known to the obscure—from Yankee Stadium and the Astrodome to the Brooklyn Dodgers’ move to Los Angeles (to a privately built ballpark constructed upon land that had been seized via eminent domain from a mostly Mexican‑American population) to such arrant giveaways as Cowboys Stadium. It examines alternatives that might lessen the pressure for public subsidies, whether the Green Bay Packers model (in which the team’s owners are local stockholders) or via league expan­sions. It also takes a look at little-known, yet significant, episodes such as President Theodore Roosevelt’s intervention in the collegiate football crisis of 1905—a move that indirectly put the federal government on the side of such basic rule changes as the legalization of the forward pass.

     They Play, You Play is a fresh look at a political and economic puzzle: how it came to be that Joe and Jane Sixpack in the Bronx and Dallas subsidize the Steinbrenners and Jerry Joneses of professional sport.

• Language: English
• Publisher: Springer
• Release date: May 10, 2012
• ISBN: 9781461433323

Book preview

James T. BennettThey Play, You Pay2012Why Taxpayers Build Ballparks, Stadiums, and Arenas for Billionaire Owners and Millionaire Players10.1007/978-1-4614-3332-3_1© Springer Science+Business Media, LLC 2012

1. Introduction

James T. Bennett¹  

(1)

Department of Economics, George Mason University, Fairfax, VA, USA

James T. Bennett

Email: [e-mail]

Abstract

If there is one economic truth upon which almost every practitioner of the art or science of economics agrees, it is that publicly financed ballparks, stadiums, and arenas built by taxpayers for professional baseball, football, basketball, and hockey teams are not good investments. We will explore the reasons why in the pages that follow, but one curious fact intrudes itself on any discussion of this matter: Joe Q. Public, instead of being outraged by these rip-offs, is of two minds when it comes to state subvention of professional sports.

If there is one economic truth upon which almost every practitioner of the art or science of economics agrees, it is that publicly financed ballparks, stadiums, and arenas built by taxpayers for professional baseball, football, basketball, and hockey teams are not good investments. We will explore the reasons why in the pages that follow, but one curious fact intrudes itself on any discussion of this matter: Joe Q. Public, instead of being outraged by these rip-offs, is of two minds when it comes to state subvention of professional sports.

On the one hand, he yells and screams about corporate welfare. Why should he or she, the hard-working taxpaying citizen, have money taken from his or her paycheck and used to build palaces of play for pampered millionaire athletes and arrogant billionaire owners who feel somehow entitled to subsidies reaching into the several hundreds of millions of dollars? Where is the fairness in that?

Yet on his other hand — or both hands, since we all know the sound of one hand clapping — he claps and hoots and makes a ruckus cheering on the home team — which really isn’t much of a home team, since all or almost all of its members are from elsewhere, live elsewhere in the off-season, and spend most of their fat paychecks elsewhere. But Joe Q. Public, when he isn’t grousing as Joe Q. Taxpayer, is Joe Q. Fan. He wears the apparel and logo of his team, whether the Bears or Yankees or Colts or Bills. He watches the team faithfully on television, shouting his approval at the rectangular set or cursing the errors and fumbles of the butterfingered local nine or eleven or six or five.

If he can afford the tickets — for they are expensive, and made even more so by the inflationary effect of the subsidized stadium, ballpark, or arena in which the team plays — he will go in person and cheer them on. Parking is ten bucks, and even though the city built the parking lot, the team keeps most or all of the fees. Once inside, he’ll pay five dollars for a microwaved hot dog and seven dollars for a lukewarm beer. The consultants who drew up fanciful reports advocating large subsidies for the team probably claimed that fans would spend their pocket money patronizing neighborhood bars and restaurants surrounding the venue, but in recent years savvy owners have realized that by spending a bit more upfront (billed to the taxpayers, most likely), stadium operators can capture the hot dog and beer (and sushi and blooming onion) trade themselves. The proles who can’t afford a ticket can watch the game on TV and drink themselves silly at O’Reilly’s Tavern across the street, but those watching the game in person will spend their disposable income within the friendly confines of these taxpayer-built edifices.

Believe it or not, the percentage of sports venues that are subsidized by taxpayers has actually declined from its peak in the Big Government heyday of the 1960s and 1970s. But since stadiums are so much more elaborate these days, with their luxury boxes and drive-in-movie-size jumbotrons and fancy club seating and specialty restaurants, the cost to taxpayers continues to rise. And like the snow in that famous Christmas song, it doesn’t show signs of stopping.

Once upon a time, ballparks were actually built by the owners of the teams that played in them. Charles Ebbets and Jacob Ruppert and those other owners in the Golden Age may not always have been model citizens, but they didn’t beg governments for playpens. They went and had the things built at their own expense, on land they bought from its rightful owners, not stole indirectly via eminent domain. In fact, the most controversial franchise relocation in the history of sport — the movement of baseball’s Dodgers from Brooklyn to Los Angeles — involved, as we shall see, one team that played in two storied stadiums, each of which came to be built in a way that was more honorable than dishonorable.

This is not to say, of course, that organized sports in America once existed in an atmosphere of pure laissez-faire. From the beginning, baseball owners used political connections to secure advantages, and as early as 1905 the President of the United States played political football as vigorously as any politician in the succeeding one hundred years. And the gridiron is where our story begins....

James T. BennettThey Play, You Pay2012Why Taxpayers Build Ballparks, Stadiums, and Arenas for Billionaire Owners and Millionaire Players10.1007/978-1-4614-3332-3_2© Springer Science+Business Media, LLC 2012

2. Politics Takes the Field

James T. Bennett¹  

(1)

Department of Economics, George Mason University, Fairfax, VA, USA

James T. Bennett

Email: [e-mail]

Abstract

Although taxpayer-funded ballparks and stadiums are the focus of this analysis, we start with several backstories which illustrate the ways in which government—even the federal government—became involved in sport. After all, hotel taxes to finance football coliseums did not just spring full blown from the brows of greedy owners and their enablers in a hundred local Chambers of Commerce. Government intervention in matters of play grew over time. If the Founding Fathers did not exactly contemplate a role for the federal city in games played with balls and bats, later politicians, whose motivations ran from simple fandom to the cynical pursuit of the pork barrel, entered the field wielding legislation, appropriations, and sometimes threats. And who better to headline our first episode than that apostle of the vigorous outdoor life, President Theodore Roosevelt?

Although taxpayer-funded ballparks and stadiums are the focus of this ­analysis, we start with several backstories which illustrate the ways in which government — even the federal government — became involved in sport. After all, hotel taxes to finance football coliseums did not just spring full blown from the brows of greedy owners and their enablers in a hundred local Chambers of Commerce. Government intervention in matters of play grew over time. If the Founding Fathers did not exactly contemplate a role for the federal city in games played with balls and bats, later politicians, whose motivations ran from simple fandom to the cynical pursuit of the pork barrel, entered the field wielding legislation, appropriations, and sometimes threats. And who better to headline our first episode than that apostle of the vigorous outdoor life, President Theodore Roosevelt?

TR Tackles Football

Roosevelt’s unprecedented interference in college football represents a melding of sports and politics that has now become commonplace, as John Sayle Watterson wrote in The Games Presidents Play: Sports and the Presidency.1

The problems in college football at the turn of the century were legion: unfair play, too many injuries, mercenary athletes, payment to and the deceptive participation of amateur players, and poor sportsmanship. (The more things change…) Offense and defense were massed like armies, in phalanxes; the battering ram was more than a metaphor, it was a way of moving (and stopping the movement of ) the ball. The Intercollegiate Football Rules Committee had a stranglehold over the game, or at least its rules, and efforts at reform annually came to naught. Whether or not the sport was really in danger of abolition has been something of a controversy among sports historians, but certain influential colleges and universities did withdraw from the game, and others threatened to. In addition, Midwestern schools chafed at the effective dictatorship of the East as embodied in the elite-school-dominated rules committee. The Midwesterners wanted to open the game up, make it less clotted and congested and productive of injuries. They wanted long runs, spectacular plays, and more touchdowns.2 (Don’t we all!) But the East turned a deaf ear to these provincial upstarts.

Until 1905, that is, when President Theodore Roosevelt, who was not terribly bothered by constitutional and historical limits upon presidential power, intervened — and the rules changed. As Guy M. Lewis of the University of Massachusetts-Amherst wrote in his study of Theodore Roosevelt’s role in the 1905 football controversy, TR was guided by two values: a belief that football was a valuable educational experience for participants and a desire for Harvard teams to be successful. Which was the more powerful motivation is an open question.

That latter motivation is somewhat charming from a distance of a century-plus, but one really must wonder whether or not the Founders who conceived the office of the president and then demarcated its powers had in mind the promotion of the interests of one college’s football team over others. Roosevelt frequently sent the team messages of encouragement, writes Lewis, which is fine, but pressuring a sport’s governing body to change the rules might be going just a tad too far, constitutionally.3 The president’s interest was more than just sentiment for the old alma mater. TR’s son Kermit played for Groton and his son Ted, though weighing under 150 pounds, lined up for the Harvard freshmen. Wife Edith worried about them, as mothers will do, and she may have played a role in her husband’s unprecedented intervention to change the rules of a sport.

The president began his campaign from an accustomed place: the bully pulpit. Speaking on the Functions of a Great University at the Alumni Dinner of Harvard on June 28, 1905, President Roosevelt declared:

I believe heartily in sport. I believe in outdoor games, and I do not mind in the least that they are rough games, or that those who take part in them are occasionally injured. I have no sympathy whatsoever with the overwrought sentimentality which would keep a young man in cotton wool, and I have a hearty contempt for him if he counts a broken arm or collar bone as of serious consequence, when balanced against the chance of showing that he possesses hardihood, physical address, and courage. But when these injuries are inflicted by others, either wantonly or of set design, we are confronted by the question not of damage to one man’s body, but of damage to the other man’s character. Brutality in playing a game should awaken the heartiest and most plainly shown contempt for the player guilty of it, especially if this brutality is coupled with a low cunning in committing it without getting caught by the umpire.4

Endicott Peabody, headmaster of Groton Preparatory School and a man whose name does not exactly sing linebacker, urged the President to convene a meeting of coaches and representatives of Harvard, Yale, and Princeton. Strange as it may seem, these three were not only football powerhouses; they were also teams notorious for rough play, for bending rules, for cheap shots and furtive brutality, for getting away with things contrary to the rules of the game. Whatever claims or pretensions to gentlemanliness these schools exhibited off the gridiron, once their students stepped onto a field between the goal lines the calfskin gloves and politesse were off, replaced by bare knuckles and bloody oaths.

And so on October 9, 1905, TR, who had never played football, gathered at the White House six representatives of elite football schools — no, not Florida, Texas, and Alabama, but the aforementioned Yale, Princeton, and Harvard.5 How times change! (Though he never played the game, to borrow the phrase Howard Cosell once applied to himself, TR did much prefer football to baseball, which he considered one step above tiddlywinks.)

The sextet invited to this conclave included Walter Camp and John Owsley of Yale, Bill Reid and Ed Nichols of Harvard, and John Fine and Arthur Hilldebrand of Princeton. Secretary of State Elihu Root was also present, presumably in case war broke out between Harvard and Yale and a mediator was needed. The eight men lunched, then TR stepped out to take care of other matters before asking three of his guests to draft a joint statement pledging their support of fair play and adherence to the rules of the game. Walter Camp would release the draft statement to the press. It read: At a meeting with the President of the United States it was agreed that we consider an honorable obligation exists to carry out in letter and spirit the rules of the game of football relating to roughness, holding, and foul play, and the active coaches of our universities being present with us pledged themselves to so regard it and to do their utmost to carry out that obligation.6

The New York Times praised the president in an editorial: Having ended the war in the Far East, grappled with the railroad rate question…prepared for his tour of the South and settled the attitude of his administration toward Senator Foraker, President Roosevelt to-day took up another question of vital interest to the American people. He started a campaign for reform in football. There were no areas of human endeavor, it seemed, that were beyond the competency of the president. As sports historian John Sayle Watterson writes, Far from elevating the tone of football, Roosevelt’s intervention only focused public scrutiny on the game — and, for the worse, because it uncorked criticisms that had been bottled up for more than a decade. In fact, the 1905 season brought about an unprecedented number of recorded fatalities and injuries.7

So the 1905 season continued in as violent a fashion as the 1904 season had, despite the president’s attempt at brokering football reform. The newspapers carried sensational stories of collegiate brutes punching, kicking, gouging, and otherwise manhandling their foes in a spirit most unlike that of the Marquis of Queensbury. Wild free-for-alls and cheap shots were aplenty; the gridiron was rife with serious injuries. A Harvard center punched a Penn player in the face. A Wesleyan gridder kicked a Columbian in the gut. Most notoriously, a Yale hoodlum, Jack Quill, ignored a Harvard player’s (Francis Burr’s) fair catch signal and smacked him full on in the face, busting his nose and pouring freshets of blood over the green field. This was too much for TR, whose son Ted had broken his nose and been bruised a week earlier in the Harvard–Yale freshman game. Not only had poor Burr been abused, but Yale had shut out Harvard for the fourth year in a row. This was too much for the head of state to bear! Informed by his Harvard sources that the Elis had played dirty and tried to knock Harvard’s top varsity player out of the game, the president put aside petty affairs of state to investigate the Harvard loss.

President Roosevelt summoned Harvard coach Bill Reid to the White House to get to the bottom of the fair-catch incident. The blame was laid upon…the referee, Paul Dashiell, who called no foul on the play. Dashiell was no mere part-time ref; he was chairman of the national rules committee of college football. He was also considered a close ally of Yale’s Walter Camp, and thus an enemy of the Harvard gridders. As football historian Watterson writes, Roosevelt concluded that Dashiell should have called a penalty.8 Maybe he should have, though Roosevelt, who had never played a down of football, had no standing other than that of a typical Monday Morning Quarterback, and the idea that the President of the United States should express public opinions on the quality of officiating in a college football game is one that would have struck every single one of President Roosevelt’s predecessors as nothing less than bizarre. Were there no limits to the power of the presidency, and to the reach of the bully pulpit?

The president wrote a letter to the referee scolding him that his bad call, or no-call, prevented all chance of Harvard winning the game.9 How many fans over the last century would have loved to dress down officials who robbed their teams of victories with letters on official White House stationery?

Although no Presidential Statement on the Rules of Football was issued on White House letterhead, Roosevelt’s intervention sent waves through the sport.

As an early historian of American football, Parke H. Davis, put it in 1911, So acute did the criticism become in the latter season [1905] that Theodore Roosevelt, President of the United States, in the month of October, called to Washington the representatives of football of Harvard, Princeton, and Yale, and impressed upon them the necessity of removing every objectionable feature of play, at the same time giving the sport, if rightly played, the prestige of his endorsement.10 Now, no president had ever given a sport the prestige of the endorsement of the executive of the federal government, for no president to that time had really considered such an endorsement his to give in the character of the President of the United States.

Nevertheless, in the next year Northwestern University and Union College dropped the sport (a player had died from injuries suffered in the Union-Rochester game), as did Stanford and the University of California. The faculty-run Columbia Committee on Student Organizations voted to disband its football team. President Nicholas Murray Butler concurred, and Columbia dropped the sport for the next ten years. (Ivy League fans would question whether Columbia plays football even now, but that’s another story.) Harvard president Charles Eliot was also anti-football. Reform, he thought, was impossible — the thing should be junked.

In fact, as Ronald A. Smith writes in Harvard and Columbia and a Reconsideration of the 1905–1906 Football Crisis, in early December 1905 the abolitionists very nearly won a major victory. Meeting at the Murray Hill Hotel in New York City on December 8, 1905, Columbia was joined by Union, Rochester, Stevens, and New York University in voting aye on the resolution that the game of football, as played under existing rules shall be abolished.11 Eight schools voted no — West Point, Wesleyan, Fordham, Syracuse, Swarthmore, Haverford, Lafayette, and Rutgers. So by a vote of eight to five, this set of thirteen influential schools voted to not recommend the abolition of the sport of collegiate football. Had two schools switched sides — let’s say Swarthmore and Haverford — the vote would have been aye. Other schools would have been under no obligation to follow their lead, of course, but many probably would have, and the possibility of college football virtually disappearing in 1906 would not have been all that far-fetched.

Strange to think, isn’t it? Such football factories as the University of Alabama, Ohio State, and Miami of Florida owe a fair debt to Swarthmore and Haverford.

Still, other schools — New York University, Northwestern — joined Columbia in dropping football. Harvard’s dons had wrestled with the appropriateness of football in their institution for decades. President Charles Eliot and the Faculty of Arts and Sciences favored abolishing the sport in 1895, but while the Harvard–Yale games of 1895 and 1896 were canceled, the sport remained. The Faculty of Arts and Sciences voted again to bar the sport in 1905, but by this time reform was in the works. And as Ronald A. Smith writes, a graduate of Harvard, Theodore Roosevelt, loved football and was in a position to attempt to save the game from possible extinction.12

TR’s next step was taken just after the December 8 meeting at which collegiate football survived by that eight-to-five vote. For the December 8 meeting led to a December 28 meeting at which the forerunner to the National Collegiate Athletic Association (NCAA) was hatched.

The problem, as of December 1905, was that despite the honeyed words of the October joint statement upon fair play and sportsmanship, the rules of the game still seemed to encourage brutality, at least in the eyes of the reformers. And those rules were devilishly hard to change. For the Intercollegiate Football Rules Committee, dominated by the large Eastern schools, was the roost of secretary Walter Camp, the coach (Yale, Stanford) and tireless publicist, who was and is known as the Father of American football. Although only in his mid-forties during the 1905 controversy, Camp was the respected eminence grise of football, a man whose integrity was beyond question — except when it was questioned.

Impatient with the obstructionism of Camp’s Rules Committee, representatives of 68 football-playing colleges and universities met on December 28, 1905, in New York to form the Intercollegiate Athletic Association of the United States. President Roosevelt, who was in frequent contact with Harvard football coach William Reid — Harvard believed that Camp was intransigently pro-Yale and anti-Harvard — assured the coach that he would exert his influence in behalf of a joint committee to reform the rules, writes Guy Lewis.13 Camp’s stranglehold would be broken — with a little help from friends in exceedingly high places.

The President lobbied for a joint session of Camp’s Intercollegiate Football Rules Committee and the upstart Intercollegiate Athletic Association of the United States. He pressured poor Dashiell, the referee who had missed the roughing call in the Harvard–Yale game and who also happened to represent the Naval Academy on the rules committee, to support the merger. It would have required an adamantine will and a complete and utter indifference to his professional fate for the representative of the U.S. Naval Academy to defy the president on a matter he cared so deeply about.

Three months of meetings followed. Ronald A. Smith has argued that Harvard’s Reid, who was effectively TR’s agent in these negotiations, was the key figure in bringing about the desired rule changes. Reid warned the old guard that the rules go through or there will be no football at Harvard; and if Harvard throws out the game, many other colleges will follow Harvard’s lead, and an important blow will be dealt to the game.14

Most of the proposed changes were accepted. And so certain basic rules of the game were irrevocably changed: thereafter, it would take ten yards instead of five to make a first down; a neutral zone was established at the line of scrimmage; and, critically, the forward pass came into being.

These seem like logical, even inevitable evolutions in the rules of the game, but that is only in hindsight. There were skeptics about the land in 1906 who wondered if such innovations as the forward pass would in fact kill the game. For instance, Benjamin Ide Wheeler, president of the University of California, declared that the altered rules had created a practically new game. No man can yet tell what that game will really be. At present it is merely a body of rules on paper. What will be the effect of the rules requiring the side with the ball to make ten yards in three downs, and the rule allowing a forward pass can be established and known only when the proposed game shall have been played for a considerable time. President Wheeler doubted that the game would have that considerable time. I do not believe the present experiment in American college football can survive, he stated confidently. In my opinion, the whole country will within five years be playing the Rugby game.15

Wheeler was not the first college president to get something disastrously wrong. Nor was he the last. Ten yards became the benchmark. (Four downs instead of three came later.) And the forward pass widened the game in ways perhaps inconceivable to the early reformers. There were, in the beginning, penalties associated with incomplete passes, and it took a while for coaches to figure out how to use them. (Woody Hayes, for one, never did figure it out.) But the fact that presidential intervention — not college presidents, but President Roosevelt — was critical to the achievement of these reforms casts the game, and the history of the interplay between sport and state, in a somewhat different light. If the rules of a boy’s game were fair game for government involvement, as Theodore Roosevelt seemed to think, then what else could government do to promote sports in America?

By 1910, the two committees had become one, now operating under the still-extant name of the National Collegiate Athletic Association, or NCAA. By protecting Harvard’s welfare and using his position in government and his personal power of persuasion to force the Rules Committee to cooperate with the reformists, TR deserves to be reckoned among the founding fathers of the National Collegiate Athletic Association, writes Guy M. Lewis.16 He is also, indirectly, the father of the forward pass, which resulted from the power shift away from Walter Camp’s committee. Whether that was a good or bad change — which may depend upon whether your favorite team has been quarterbacked by Tom Brady or Ryan Leaf — one can legitimately ask whether or not it is a change in which the President of the United States should have any say whatsoever.

Roosevelt’s intervention in organized sports has practically no parallel in the history of the American presidency, observes sports historian Watterson, though a somewhat less vigorous exerciser, Bill Clinton, intervened unsuccessfully to solve the baseball strike of 1994–1995.17

President Roosevelt did not issue any ukases reordering the game of football. He lacked the power. As Watterson writes, Roosevelt could not have ordered an end to gridiron violence or football even if he had wished to do so. With the exception of the service academies, he had no authority to issue edicts binding the colleges or altering their athletic policies. As Roosevelt clearly indicated, he had no desire to abolish a sport that he regarded as so essential for building toughness and character.18

Yet, all the president’s meddling triggered a series of conferences involving representatives of football-playing colleges that eventually led, over the next couple of years, to significant, game-altering rule changes intended to open up the game. (Which they certainly did.) Most football fans would say that these changes were for the better, and it is possible that they would have come about had the president never uttered a word about football. But they would not have come about quite so quickly, and the question remains as to whether federal intervention in sport is wise or constitutional policy — even if that intervention leads to Don Hutson, Otto Graham, Jerry Rice, and Peyton Manning.

The Red Team

By the 1920s, sports mania had swept the land. Babe Ruth, Walter Johnson, Jack Dempsey…young and old alike followed the exploits of larger-than-life athletes through the burgeoning media of daily newspapers, radio, and, increasingly, newsreels at the movie theater. Politicians labored to associate themselves with popular athletes and successful teams; baseball, especially, was the all-American game.

Even the communists got into the spirit, though their motives were far from Olympian pure. As Mark Naison explains in Lefties & Righties: The Communist Party and Sports During the Great Depression, the Communist Party USA was almost entirely a foreign-born movement in the early 1920s. Only one in ten Communists spoke English as a first language. The party organized networks of sports clubs, but the sports which they emphasized — soccer, gymnastics, and track and field — were ones which had little attraction for native Americans or even second generation immigrants.19

Americans wanted to play and watch baseball and football and boxing. They flocked in the millions to voluntary organizations and leagues, which permitted them to do so. The YMCA, the AAU (American Athletic Union), churches, and ethnic clubs sponsored sports leagues in a nationwide demonstration of the associational voluntarism of which French observer Alexis de Tocqueville had written a century earlier in his classic Democracy in America.

Unable to beat Y teams and church leagues,